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Attorneys General Argue That Minimum Weekly Salary Level Is Fair To Employers And Employees, Vital To Effective State Labor Law Enforcement

Attorney General Eric T. Schneiderman led a coalition of Attorneys General in opposing the Trump administration’s efforts to roll back overtime pay protections for hundreds of thousands of New Yorkers and millions of Americans.

The Attorneys General submitted comments in response to U.S. Department of Labor’s Request for Information concerning the executive, administrative, and professional (EAP) exemption to the Fair Labor Standards Act (FLSA). By this action, the USDOL threatens to roll back the Obama administration’s rule set to go into effect last year that would have expanded overtime pay protections for workers by setting a salary floor below which the exemption from overtime laws cannot apply. Workers impacted include those subject to misclassification as executive employees, like first-line supervisors at fast-food stores, car washes, retail stores, and construction sites; administrative employees, such as clerical and office workers; and professional employees, such as medical and dental technicians, mid-level IT employees, and film and television production assistants.

“The Labor Department should be protecting workers’ rights, not undermining them at every turn,” said Attorney General Schneiderman. “Rolling back these overtime protections would threaten hundreds of thousands of hardworking New Yorkers who deserve a fair day’s pay for a fair day’s work. I’m committed to using the full force of my office to ensure that all workers are treated with the fairness and dignity they deserve.”

Click here to read the comments, which were led by Attorney General Schneiderman and filed by the Attorneys General of New York, California, Delaware, Illinois, Iowa, Maryland, Massachusetts, Vermont, and Washington.

Under the Obama administration, the USDOL issued a new rule raising the minimum weekly salary amount used in assessing the EAP exemption from $455 to $913, and created a mechanism for automatically updating the salary level based on actual changes in salary levels around the country. Following a Texas district court’s recent decision to enjoin the rule, the Trump administration has not yet made clear whether it intends to appeal the court’s decision and, rather, said that USDOL “has decided not to advocate for the specific salary level ($913 per week) set in the 2016 Final Rule.”

Attorney General Schneiderman and the coalition of Attorneys General submitted a comment, asserting that the 2016 Final Rule struck an appropriate balance of employer and employee interests in setting the $913 salary level, which was the outcome of a two-year federal rule-making process in which the USDOL reviewed more than 270,000 comments from a broad array of constituencies, including worker organizations and unions, small businesses, Fortune 500 corporations, state and local governments, and economists.

The comments submitted by the Attorneys General explain that, despite federal and state enforcement efforts, rampant violations of labor laws have continued nationwide – and a study of low-wage workers in large cities, including New York City, found that more than three-quarters were not paid overtime in accordance with federal law. The AGs argue that a meaningful salary test is essential to protecting workers from being misclassified as EAP exempt when they are lawfully entitled to receive overtime for hours worked beyond 40 hours a week. They urge USDOL to set a salary level that is at least as protective as the 2016 Final Rule, which was in line with USDOL’s longstanding historical practice.

The comment also argues that a meaningful salary level test makes state labor law enforcement more effective and efficient, and weakening the salary level test will force employees, employers, and states to rely instead on a fact-specific “duties” test that is more susceptible to exploitation. Even for well-intentioned, law-abiding employers, a salary level test is a useful bright line, particularly for small companies that may not have sophisticated employment counsel to advise them on the more complex duties test. Because enforcement is more difficult without a salary level test, misclassification would be even more pervasive, due to employer and employee uncertainty, as well as intentional abuse by employers. Low-wage workers are particularly vulnerable to exploitation and generally cannot afford their own private counsel.

Finally, the Attorneys General urge USDOL to adopt an automatic updating formula that is at least as protective of workers as the one set forth in the 2016 Final Rule, and not risk letting labor protections erode again due to legislative or regulatory inaction.